Thursday, November 3, 2011

Andy Borowitz and the buy case for Bank of America

Andy Borowitz (a daily email you must have) lays out the buy case for Bank of America succinctly:

A Letter from Bank of America

An Apology to Our Customers

NEW YORK (The Borowitz Report) – The following letter was sent today by Bank of America to all of its debit card customers:

Dear Valued Customer:

As most of you probably know by now, last month we instituted a $5 monthly fee for all of our debit card users. To say that what followed this decision was a shitstorm would be a massive understatement.

Considering that just three years earlier taxpayers had bailed us out with billions of their hard-earned dollars, it’s understandable that Bank of America was compared to a person who, as he is pulled from a burning building, turns and kicks the fireman in the nuts.

That’s why we are writing to you today with a simple message: “Our bad.” And to tell you that we are refunding the $5 to you, effective immediately. All you have to do is pay a simple, one-time $10 refund fee.

You can receive your refund online, or pick it up at your nearest Bank of America branch, where a teller will hand the money directly to you for a simple, one-time $15 handling fee.

If you do visit your branch, feel free to use any of our services, including our state of the art ballpoint pens and deposit slips. (Prices on request.)

Again, accept our apologies for instituting the debit card fee. We have learned our lesson, and we make this solemn promise: next time we squeeze money from you, we’ll do it in a way you won’t notice.

John - I view BAC as somewhat of a binary situation: 1x down or 3x or 4x up. Esentially a call option on USA recovery. What could 'kill' this investment? I.e. what realistic situation could wipe out shareholders on this?

I'm sorry for this, Hempton, because it's off topic but this has almost become a white whale for me.

HRBN's closing seems to be delayed. The OCC is saying that DTCC hasn't distributed money to shareholders because they haven't received it yet. No word as to what's going to happen in the next few days.

If no one writes a book about this crazy company I just might do it myself.

Eh. Borowitz has made a career out of being less funny than the people who first told his jokes. But we all have to make our sacrifices for Mother Earth, I suppose, and at least he's a conscientious recycler.

With respect to comparables for HRBN, if it in fact fails -There was a small deal around 1980, where Ohio Ferroalloys was to be bought by Fesil, a Scandinavian firm. First there was a price cut on the deal price. There was a vote, and OFER and the lawyers went to the closing, and Fesil never showed up. As Fesil had no US assets, the deal simply broke at the last minute with no way to sue the buyer who reneged.

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The content contained in this blog represents the opinions of Mr. Hempton. Mr. Hempton may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Hempton's recommendations. The commentary in this blog in no way constitutes a solicitation of business or investment advice. In fact, it should not be relied upon in making investment decisions, ever. It is intended solely for the entertainment of the reader, and the author. In particular this blog is not directed for investment purposes at US Persons.